Fallacies of Insurance Need by Business Owners

Business owners, from bakers and pool services to IT consultants ask the same question, “Do I need business insurance?” The answer is always the same, “YES!” No matter the rationale, no matter the explanation, the bottom line is every business needs insurance. Yet, many business owners offer fallacies of why their business doesn’t. .

Fallacy#1

“Nobody will ever sue me.” Which can also sound like, “I don’t make any money, and you can’t squeeze blood from a stone.” I set up an LLC or any other statement of my business isn’t worth suing.

Any business and everyone can be sued. LLC’s can be broken. Once a judgment is rendered, a persistent attorney can file a judgment lien which doesn’t go away. Assets can be frozen or seized and wages garnished.

Fallacy#2

“It’s a corporation, they can’t get me.” Is another one we hear time and time again.

Incorporating protects the officers and owners from actions or damages against the corporation under most situations. However, that corporate shield can be pierced or even stripped and a business owner held liable personally. Without doing a case study, the smaller and newer the corporation, the more likely this could happen.

Fallacy#3

‘If something happens to me, it’s no big deal.”

Most businesses don’t survive the death of a principle. Often, the business is dissolved to pay off obligations. Banks may get nervous and escalate loans or cut credit lines, employees may leave.

Insure your business and your peace of mind. It’s a small price to pay for taking care of the risks associated with owning and running a business. Pull your head out of the sand and understand reality vs. fallacy.

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